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# Collateral Tokens (preCT) 💸

All prePO positions are backed by **preCT (prePO Collateral Tokens)**.

preCT is backed by a basket of **yield bearing USD stablecoins** (e.g. [yearn's](https://docs.yearn.finance/) [yvUSDC](https://etherscan.io/address/0xa354F35829Ae975e850e23e9615b11Da1B3dC4DE)).

Positions being backed with preCT means Traders and LPs receive **passive yield** on all of their prePO assets.

<figure>
  <img alt="finantial exclusion" src={useBaseUrl("/img/prect.png")} />
  <figcaption>Chad Enjoying Passive Yield.</figcaption>
</figure>

preCT operates **entirely in the background** and is **completely hidden from users**. All amounts in the UI are denominated in USD, with preCT earnings displayed simply as 'Interest Earned (USD)'.

Curation of the basket of assets backing preCT is the responsibility of [prePO Governance](/governance).
